UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)
RECOVERY ENGINEERING, INC.
---------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
---------------------------------------------------------------
(Title of Class of Securities)
756269106
-----------------------------
(CUSIP NUMBER)
DAVID J. GREENWALD, ESQ.
GOLDMAN, SACHS & CO.
85 BROAD STREET
NEW YORK, NY 10004
(212) 902-1000
---------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
APRIL 24, 1997
-----------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of
this Schedule 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4), check the following box [ ].
SCHEDULE 13D
CUSIP No. 756269106 Page 2 of 17 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Goldman, Sachs & Co.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [X]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
NUMBER OF 7 SOLE VOTING POWER
0
SHARES
8 SHARED VOTING POWER
BENEFICIALLY 1,010,101
OWNED BY EACH 9 SOLE DISPOSITIVE POWER
0
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON WITH 1,010,101
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,010,101
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
18.9%
14 TYPE OF REPORTING PERSON*
BD-PN-IA
SCHEDULE 13D
CUSIP No. 756269106 Page 3 of 17 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
The Goldman Sachs Group, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
1,000
SHARES
8 SHARED VOTING POWER
BENEFICIALLY 1,010,101
OWNED BY EACH 9 SOLE DISPOSITIVE POWER
1,000
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON WITH 1,010,101
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,011,101
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
18.9%
14 TYPE OF REPORTING PERSON*
HC-PN
SCHEDULE 13D
CUSIP No. 756269106 Page 4 of 17 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
GS Capital Partners II, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
0
SHARES
8 SHARED VOTING POWER
BENEFICIALLY 633,767
OWNED BY EACH 9 SOLE DISPOSITIVE POWER
0
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON WITH 633,767
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
633,767
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.8%
14 TYPE OF REPORTING PERSON*
PN
SCHEDULE 13D
CUSIP No. 756269106 Page 5 of 17 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
GS Capital Partners II Offshore, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
NUMBER OF 7 SOLE VOTING POWER
0
SHARES
8 SHARED VOTING POWER
BENEFICIALLY 251,948
OWNED BY EACH 9 SOLE DISPOSITIVE POWER
0
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON WITH 251,948
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
251,948
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.5%
14 TYPE OF REPORTING PERSON*
PN
SCHEDULE 13D
CUSIP No. 756269106 Page 6 of 17 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
GS Capital Partners II (Germany) Civil Law
Partnership (with limitation of liability)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Germany
NUMBER OF 7 SOLE VOTING POWER
0
SHARES
8 SHARED VOTING POWER
BENEFICIALLY 23,376
OWNED BY EACH 9 SOLE DISPOSITIVE POWER
0
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON WITH 23,376
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
23,376
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.5%
14 TYPE OF REPORTING PERSON*
PN
SCHEDULE 13D
CUSIP No. 756269106 Page 7 of 17 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
GS Advisors, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
0
SHARES
8 SHARED VOTING POWER
BENEFICIALLY 633,767
OWNED BY EACH 9 SOLE DISPOSITIVE POWER
0
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON WITH 633,767
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
633,767
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.8%
14 TYPE OF REPORTING PERSON*
PN
SCHEDULE 13D
CUSIP No. 756269106 Page 8 of 17 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
GS Advisors II (Cayman), L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
NUMBER OF 7 SOLE VOTING POWER
0
SHARES
8 SHARED VOTING POWER
BENEFICIALLY 251,948
OWNED BY EACH 9 SOLE DISPOSITIVE POWER
0
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON WITH 251,948
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
251,948
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.5%
14 TYPE OF REPORTING PERSON*
PN
SCHEDULE 13D
CUSIP No. 756269106 Page 9 of 17 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Goldman, Sachs & Co. oHG
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Germany
NUMBER OF 7 SOLE VOTING POWER
0
SHARES
8 SHARED VOTING POWER
BENEFICIALLY 23,376
OWNED BY EACH 9 SOLE DISPOSITIVE POWER
0
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON WITH 23,376
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
23,376
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.5%
14 TYPE OF REPORTING PERSON*
PN
SCHEDULE 13D
CUSIP No. 756269106 Page 10 of 17 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Stone Street Fund 1996, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
0
SHARES
8 SHARED VOTING POWER
BENEFICIALLY 60,191
OWNED BY EACH 9 SOLE DISPOSITIVE POWER
0
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON WITH 60,191
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
60,191
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.4%
14 TYPE OF REPORTING PERSON*
PN
SCHEDULE 13D
CUSIP No. 756269106 Page 11 of 17 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Bridge Street Fund 1996, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
0
SHARES
8 SHARED VOTING POWER
BENEFICIALLY 40,819
OWNED BY EACH 9 SOLE DISPOSITIVE POWER
0
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON WITH 40,819
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
40,819
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.9%
14 TYPE OF REPORTING PERSON*
PN
SCHEDULE 13D
CUSIP No. 756269106 Page 12 of 17 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Stone Street Empire Corp.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
0
SHARES
8 SHARED VOTING POWER
BENEFICIALLY 101,010
OWNED BY EACH 9 SOLE DISPOSITIVE POWER
0
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON WITH 101,010
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
101,010
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.3%
14 TYPE OF REPORTING PERSON*
CO
This Amendment No. 2 (this "Amendment No. 2") is being
filed by GS Capital Partners II, L.P. ("GSCP"), GS Capital
Partners II Offshore, L.P. ("GSCP II Offshore"), GS Capital
Partners II (Germany) Civil Law Partnership (with limitation of
liability) ("GSCP II Germany," and together with GSCP and GSCP II
Offshore, "GSCP II"), GS Advisors, L.P. ("GS Advisors"), GS
Advisors II (Cayman), L.P. ("GS Advisors Cayman"), Goldman, Sachs
& Co. oHG ("GS oHG"), Stone Street Fund 1996, L.P. ("Stone
Street"), Bridge Street Fund 1996, L.P. ("Bridge Street," and
together with Stone Street, the "Stone/Bridge Funds"), Stone
Street Empire Corp. ("Empire Corp."), Goldman, Sachs & Co.
("Goldman Sachs") and The Goldman Sachs Group, L.P. ("GS Group,"
and together with GSCP, GSCP II Offshore, GSCP II Germany, GS
Advisors, GS Advisors Cayman, GS oHG, Stone Street, Bridge
Street, Empire Corp. and Goldman Sachs, the "Filing Persons")(FN1) to
amend and supplement the Statement on Schedule 13D (the "Original
Schedule 13D") filed by the Filing Persons on July 29, 1996, and
Amendment No. 1 to the Original Schedule 13D (the "Amendment No.
1"), filed by the Filing Persons on April 9, 1997, in respect of
the Common Stock, par value $0.01 per share (the "Common Stock"),
of Recovery Engineering, Inc., a Minnesota corporation (the
"Company"). Capitalized terms used but not defined herein shall
have the respective meanings given to them in Amendment No. 1, or
if not defined therein, in the Original Schedule 13D.
ITEM 4. PURPOSE OF TRANSACTION
The Limited Partnerships and the Company have clarified
the Amendment to the Securities Purchase Agreement described in
Amendment No. 1, which clarifications are memorialized in a
letter (a copy of which is attached as Exhibit 1).
To reflect the foregoing, Item 4 of the Original
Schedule 13D, as amended by Amendment No. 1, is hereby further
amended by adding the following sentence after the first sentence
of the second paragraph thereof:
If applicable, these adjustments shall be made (i) for
conversions occurring on or after July 19, 1999, and
(ii) for conversions following a Change in Control (as
defined in the Purchase Agreement) or in connection with
a tender offer for the Company's Common Stock.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1: Letter, dated April 24, 1997, from the
Limited Partnerships to the Company.
- ---------------
(FN1) Neither the Original Schedule 13D, this Amendment No. 1
nor anything contained therein or herein shall be
construed as an admission that any Filing Person
constitutes a "person" for any purpose other than Section
13(d) of the Securities Exchange Act of 1934, as amended.
SIGNATURE
After reasonable inquiry and to the best of its
knowledge and belief, the undersigned certifies that the
information set forth in this statement is true, complete and
correct.
Dated: April 29, 1997 GS CAPITAL PARTNERS II, L.P.
By: GS Advisors, L.P.,
its general partner
By: GS Advisors, Inc.,
its general partner
By: /s/ Carla H. Skodinski
---------------------------
Name: Carla H. Skodinski
Title: Vice President
GS ADVISORS, L.P.
By: GS Advisors, Inc.,
its general partner
By: /s/ Carla H. Skodinski
---------------------------
Name: Carla H. Skodinski
Title: Vice President
GS CAPITAL PARTNERS II OFFSHORE, L.P.
By: GS Advisors II (Cayman), L.P.
its general partner
By: GS Advisors II, Inc.,
its general partner
By: /s/ Carla H. Skodinski
---------------------------
Name: Carla H. Skodinski
Title: Vice President
GS ADVISORS II (CAYMAN), L.P.
By: GS Advisors II, Inc.,
its general partner
By: /s/ Carla H. Skodinski
---------------------------
Name: Carla H. Skodinski
Title: Vice President
GS CAPITAL PARTNERS II (Germany) CIVIL
LAW PARTNERSHIP (with limitation of
liability)
By: Goldman, Sachs & Co. oHG,
its managing partner
By: /s/ Carla H. Skodinski
---------------------------
Name: Carla H. Skodinski
Title: Attorney-in-fact
GOLDMAN, SACHS & CO. oHG
By: /s/ Carla H. Skodinski
---------------------------
Name: Carla H. Skodinski
Title: Attorney-in-fact
GOLDMAN, SACHS & CO.
By: /s/ Barry S. Volpert
---------------------------
Name: Barry S. Volpert
Title: Managing Director
THE GOLDMAN SACHS GROUP, L.P.
By: The Goldman Sachs Corporation,
its general partner
By: /s/ Barry S. Volpert
---------------------------
Name: Barry S. Volpert
Title: Executive Vice
President
STONE STREET FUND 1996, L.P.
By: Stone Street Empire Corp.,
its general partner
By: /s/ Carla H. Skodinski
---------------------------
Name: Carla H. Skodinski
Title: Vice President
BRIDGE STREET FUND 1996, L.P.
By: Stone Street Empire Corp.,
its managing general partner
By: /s/ Carla H. Skodinski
---------------------------
Name: Carla H. Skodinski
Title: Vice President
STONE STREET EMPIRE CORP.
By: /s/ Carla H. Skodinski
---------------------------
Name: Carla H. Skodinski
Title: Vice President
INDEX OF EXHIBITS
Exhibit 1: Letter, dated April 24, 1997, from the Limited
Partnerships to the Company.
April 24, 1997
Recovery Engineering, Inc.
2229 Edgewood Avenue South
Minneapolis, Minnesota 55426
Attention: Brian F. Sullivan
Dear Mr. Sullivan:
Reference is made to Amendment No. 1 (the "Amendment"),
dated as of March 31, 1997, to the Securities Purchase Agreement,
dated as of July 19, 1996 (the "Agreement"), between Recovery
Engineering, Inc., and GS Capital Partners II, L.P., GS Capital
Partners II Offshore, L.P., Goldman, Sachs & Co. Verwaltungs
GmbH, Stone Street Fund 1996, L.P. and Bridge Street Fund 1996,
L.P. Capitalized terms not otherwise defined herein shall have
the respective meaning given to them in the Amendment or, if not
defined therein, in the Agreement.
This letter is to clarify our understanding regarding
Section 2.3 of the Amendment. It is the intention and the
understanding of the parties hereto that paragraph (j) of Section
9.6 of the Agreement shall be applicable to Subject Conversions
that occur on or after the third anniversary of the Closing Date,
and to Subject Conversions that occur following a Change in
Control regardless of when such Change in Control occurs. In the
case of Subject Conversions in which the shares received in the
conversion are to be tendered in a then pending tender offer,
paragraph (j) of Section 9.6 shall be applicable except that the
"Average Price" for purposes of such conversion shall be the
price per share offered to shareholders in the tender offer.
If the foregoing reflects your understanding of our
arrangement, please sign this letter and the enclosed copy and
return one of them to us, whereupon the foregoing shall be a
binding agreement between us.
GS CAPITAL PARTNERS II, L.P.
By: GS Advisors, L.P., its general
partner
By: GS Advisors, Inc., its general
partner
By: /s/ Carla H. Skodinski
--------------------------------
Name: Carla H. Skodinski
Title: Vice President
GS CAPITAL PARTNERS II OFFSHORE, L.P.
By: GS Advisors II (Cayman), L.P., its
general partner
By: GS Advisors II, Inc., its general
partner
By: /s/ Carla H. Skodinski
--------------------------------
Name: Carla H. Skodinski
Title: Vice President
GOLDMAN, SACHS & CO. VERWALTUNGS GmbH
By: /s/ Joseph Gleberman
--------------------------------
Name: Joseph Gleberman
Title: Managing Director
By: /s/ Carla H. Skodinski
--------------------------------
Name: Carla H. Skodinski
Title: Registered Agent
STONE STREET FUND 1996, L.P.
By: Stone Street Empire Corp., its
general partner
By: /s/ Carla H. Skodinski
--------------------------------
Name: Carla H. Skodinski
Title: Vice President
BRIDGE STREET FUND 1996, L.P.
By: Stone Street Empire Corp., its
managing general partner
By: /s/ Carla H. Skodinski
--------------------------------
Name: Carla H. Skodinski
Title: Vice President
Agreed to and accepted
as of the date first above written
RECOVERY ENGINEERING, INC.
By: /s/ Brian F. Sullivan
--------------------------------
Name: Brian F. Sullivan
Title: President and CEO
cc: Eric O. Madson (Winthrop & Weinstine)
